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Message
Anyone have insight into flood insurance on beach property?
Posted on 3/13/12 at 6:34 pm
Posted on 3/13/12 at 6:34 pm
Just curious if any folks here have insight or suggestions regarding flood insurance costs/policies on Gulf or Atlantic beach property?
4
Posted on 3/13/12 at 7:36 pm to NC_Tigah
quote:
flood insurance costs/policies
Every policy is the same and is administered by FEMA, it does not matter which company you buy from it is a FEMA policy...
ETA- Lloyds and a few others might offer some supplemental coverage...
Posted on 3/13/12 at 8:28 pm to NC_Tigah
Almost all flood insurance is through the National Flood Insurance Program. IIRC, Chubb Group does as well.
I would be worried about the future insurability if your dwelling. The program has been in limbo for years and basically receives short term extensions. There are current proposals in Congress to raise flood premiums to actuarial sound rates as part of any extension of the program, so in May you may either have no flood insurance or dramatically more expensive flood insurance.
I would be worried about the future insurability if your dwelling. The program has been in limbo for years and basically receives short term extensions. There are current proposals in Congress to raise flood premiums to actuarial sound rates as part of any extension of the program, so in May you may either have no flood insurance or dramatically more expensive flood insurance.
Posted on 3/13/12 at 10:25 pm to Athanatos
You should be aware that not all communities participate in the national flood insurance program (NFIP) which means that it is possible that a property is not eligible for insurance from the federally subsidized program. If coverage is needed to secure a loan it may be available in the excess market but may be cost prohibitive.
Posted on 3/13/12 at 11:01 pm to NC_Tigah
Some coworkers own places in Myrtle Beach as well as Pawley Island. Insurance seems to be a minimal expense on the Atlantic coast, compared to the gulf.
Do you live in Gastonia?
Do you live in Gastonia?
Posted on 3/14/12 at 4:30 am to wickowick
quote:That's more along the lines of what I was wondering about. Quotes seem high.
ETA- Lloyds and a few others might offer some supplemental coverage...
Posted on 3/14/12 at 10:45 am to NC_Tigah
quote:
That's more along the lines of what I was wondering about. Quotes seem high.
Until a covered event occurs, then it seems cheap, like underpriced wind coverage was.
Posted on 3/14/12 at 1:16 pm to tirebiter
quote:Yes, the nature of the beast, but I suspect if you saw the quote you'd not consider it cheap
Until a covered event occurs, then it seems cheap
Posted on 3/14/12 at 1:43 pm to NC_Tigah
Yeah, I wasn't implying that it's cheap upfront, just that risk/odds of major weather events have been severely underpriced in the past and if an insured wants to be able to collect then prices for coverage have to be reasonably priced to cover the risk. Many excess line writers and syndicates have been pushed to the brink by incorrect assumptions/models/pricing.
It's nothing personal, but I find it off-putting that tax payers subsidize owners of houses for those choosing to buy property in known flood prone areas: beach, river, lake, low lying 100-yr floodplain, wherever. If the property owner makes money it is not shared with tax payers, but the losses are. The flooding along the MS last year is a perfect example, then people with mortgages were gaming the program trying to take advantage of a clause enabling them to add coverage at the last second when they should have been paying for years.
Coverage is a cost drag, probably never entered the minds of buyers of beach proximity FL properties 10-years ago. I will be shocked if areas prone to tornadic activity don't start seeing significant premium increases or form of high deductible/loss sharing in the future for specific events, GA is included in that pattern as insurers have lost their asses here the last two years.
It's nothing personal, but I find it off-putting that tax payers subsidize owners of houses for those choosing to buy property in known flood prone areas: beach, river, lake, low lying 100-yr floodplain, wherever. If the property owner makes money it is not shared with tax payers, but the losses are. The flooding along the MS last year is a perfect example, then people with mortgages were gaming the program trying to take advantage of a clause enabling them to add coverage at the last second when they should have been paying for years.
Coverage is a cost drag, probably never entered the minds of buyers of beach proximity FL properties 10-years ago. I will be shocked if areas prone to tornadic activity don't start seeing significant premium increases or form of high deductible/loss sharing in the future for specific events, GA is included in that pattern as insurers have lost their asses here the last two years.
Posted on 3/14/12 at 2:13 pm to NC_Tigah
quote:
Yes, the nature of the beast, but I suspect if you saw the quote you'd not consider it cheap
Can you give us a clearer picture of the pricing and the risk?
Posted on 3/14/12 at 2:38 pm to NC_Tigah
NFIP is the only place you are going to be able to buy it. It pays up to $500,000 I believe. If you have real property in an A or AE flood zone that is greater than that, you can buy excess flood from a private carrier to cover the amont over $500,000.
ETA: I am an excess/surplus wholesale/broker in Charlotte, NC. A substantial portion of my book is in coastal SC.
ETA: I am an excess/surplus wholesale/broker in Charlotte, NC. A substantial portion of my book is in coastal SC.
This post was edited on 3/14/12 at 2:50 pm
Posted on 3/14/12 at 2:44 pm to tirebiter
quote:Not taken personally at all. Majority of insurance in this case will have to come thru a private carrier anyway.
It's nothing personal, but I find it off-putting that tax payers subsidize owners of houses for those choosing to buy property in known flood prone areas: beach, river, lake, low lying 100-yr floodplain, wherever.
FWIW, cost of FEMA's NFIP runs slightly north of 1/50th property value/yr. So do the added coverage (supplemental) programs. Unless every home covered is destroyed every 50yrs, it would seem taxpayers are not supplementing much. Just seemed >2% of property value per year was steep. But apparently not.
Posted on 3/14/12 at 2:46 pm to Athanatos
quote:VE
risk?
This post was edited on 3/14/12 at 2:47 pm
Posted on 3/14/12 at 2:54 pm to NC_Tigah
quote:
Just seemed >2% of property value per year was steep. But apparently not.
That would be a $2.00 rate. I don't think that this is that bad at all.
Posted on 3/14/12 at 3:28 pm to NC_Tigah
quote:
Just seemed >2% of property value per year was steep. But apparently not.
Well, it depends. If you need to access it is cheap, if not it's cumulatively expensive. Including wind, contents, etc how much is the total insurance cost as a percentage? Seems like property owners in each geographic area could form their own pool as a first layer of loss for "x" and seek Fed program as "excess", but probably still more expensive.
Posted on 3/14/12 at 3:45 pm to tirebiter
quote:About 3% (land not included).
how much is the total insurance cost as a percentage?
Posted on 3/14/12 at 4:32 pm to NC_Tigah
To a somewhat conservative fella like me, and assuming it is a rather expensive property given the excess layer needed, that is a lot of cash out of pocket annually. Don't think it is exorbitant as a %age of value. Guess it really depends if you are OK with it, how good a value you are getting on the property, how much enjoyment you will get from the property, will it have some level of rental income to offset some costs or just for primary living, how much have ins costs changed in the last 3-yrs, etc.
You are a smart guy, you will have thought of this. My motto, which I got from my dad, is "rent other people's beach property".
You are a smart guy, you will have thought of this. My motto, which I got from my dad, is "rent other people's beach property".
Posted on 3/15/12 at 7:53 am to mule74
quote:Missed this before.
ETA: I am an excess/surplus wholesale/broker in Charlotte, NC. A substantial portion of my book is in coastal SC.
Any "best option" for NFIP supplementation out there IYO?
Did locate flood supplement running ~1%/annum which seems more reasonable.
This post was edited on 3/15/12 at 4:04 pm
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